Christine Scullion

The Senate HELP Committee cancelled a mark-up of the Senate version of Perkins CTE reauthorization this week. Perhaps negotiations are ongoing and a bipartisan agreement will emerge, but the window for action is quickly closing.

Manufacturers have advanced key issues in the 114th Congress, even during a time when some of the most contentious factions exist within the House of Representatives. Earlier this month, the House compromised to approve (405-5) similar legislation that the Senate is struggling to agree on during this compressed September schedule. This is a program in need of positive change, and legislating does not need to be this challenging.

The Senate needs to put its differences aside and work together to get Perkins done. If the Senate does not put skin in the game soon, it may well be game over for Perkins CTE reauthorization in this congressional round—leaving the next Congress to start from square one. So much work has been accomplished to get to this point, it would be unfortunate to jettison this important effort that supports the next generation of manufacturing workers.

Manufacturers are actively working on solutions to close a skills gap that is hindering productivity and the overall ability for American manufacturers to be more innovative and competitive in the global market. They continue to engage on a local level to communicate the skills they are looking for. They are partnering with educational institutions to develop programs and working with local governments to drive the change needed to remedy the skills gap. Without an updated Perkins—which reflects the needs of the modern employer—they lose their competitive edge.

“When you got skin in the game, you stay in the game. But you don’t get a win unless you play in the game. Oh, you get love for it, you get hate for it. You get nothing if you wait for it, wait for it, wait for it…” Lin-Manuel Miranda, Hamilton

Tomorrow, the House Education and the Workforce Committee will be considering H.R. 5587, the Strengthening Career and Technical Education for the 21st Century Act, sponsored by Reps. G.T. Thompson (R-PA) and Katherine Clark (D-MA), which reauthorizes the Perkins Act. The NAM urges swift passage of this legislation and is looking forward to consideration by the full House of Representatives.

Manufacturers are looking to aggressively pursue policies that will help maintain and strengthen the future of America’s manufacturing base. The NAM supports efforts to educate and train the next generation on the manufacturing workforce through efforts such as promotion of career and technical education through the reauthorization of the Perkins Act.

The legislation improves employer engagement in the workforce development and training system by aligning the definitions and functions of the program to the Workforce Innovation and Opportunity Act, reducing the bureaucracy that can often hinder employer engagement. In addition, it places significant emphasis on industry-recognized credentials, focuses on jobs in demand in a given geographic area and promotes work-based learning.

The NAM is pleased to see that this legislation allows funds authorized under the Perkins Act to be used to purchase manufacturing equipment and pay for certification exams upon completion of training. These recommended changes to existing law are a significant improvement that will allow for more advanced and aligned training for the manufacturing sector.

The Strengthening Career and Technical Education for the 21st Century Act is a significant step toward allowing manufacturers to improve engagement in the workforce development system, and the NAM urges the committee to support the bill and pass this important piece of legislation.

Today, the House is considering positive legislation allowing small employers the flexibility to offer pretax dollars to help pay premiums and/or other out-of-pocket costs associated with medical care and services. The Small Business Health Care Relief Act (H.R. 5447), sponsored by Reps. Charles Boustany (R-LA) and Mike Thompson (D-CA), allows employers with fewer than 50 employees to provide Health Reimbursement Arrangements (HRAs) to employees with health insurance.

Effective July 1, 2015, an IRS guidance placed a $100-per-day, per-employee penalty for employers that fail to offer a group health plan but provide tax-preferred dollars through an HRA for their workers to pay health insurance premiums or other direct medical expenses. The Small Business Health Care Relief Act allows small businesses—that are not required by the Affordable Care Act to provide health insurance—to provide some assistance to their employees and provide these HRAs. This simple, logical and bipartisan change will increase coverage, improve flexibility and promote wellness for manufacturers and other small employers.

The NAM recently signed onto a letter encouraging passage of this legislation in the House, and we urge action in the Senate.

Nearly half of all Americans receive health insurance benefits from an employer. And manufacturers in particular take great pride in offering health coverage to their employees—ninety-seven percent of NAM members provide health insurance to their workers and families. It’s not only a matter of doing the right thing; it’s also about keeping employees healthy and productive in a globally competitive economy. Furthermore, employees are grateful for the benefits provided to them. A 2015 Employee Benefit Research Institute (EBRI) study found that only 9 percent of employees were unsatisfied with their health care plans.

Since World War II, employers have been actively engaged in providing health care to their employees. First as basic coverage, but today that has grown into coverage for vison and dental plans, wellness and even on-site clinics. Despite the mandates, additional regulation and taxes imposed on employers as a result of the Affordable Care Act (ACA), manufacturers are proud to provide health care, and many work against the odds to continue to do so. Read More

A recent report released by the Manufacturing Institute shows that 82 percent of manufacturers have a moderate to severe shortage of highly skilled applicants and face reduced earnings of up to 11 percent annually due to skills shortages. These facts bear out the plain and simple fact that there are not enough highly-skilled workers to meet the increasingly technological demands of manufacturing. This is true despite manufacturing employees being compensated almost 9 percent more than other industries and manufacturers spending an average of $1500 per employee per year on training.

To help fill this gap, manufacturers may attempt to recruit foreign-born workers through the use of H-1B visas, a limited but valuable method of ensuring that the next generation of innovation comes from the US. This issue affects manufacturers from California to New York in all manufacturing sectors from what people traditionally think of as hi-tech industries to heavy equipment and metal fabricating – and many of these potential employees are recruited because they are graduating from U.S. universities with the skills and training manufacturers are looking for. Read More

The Canadian government recently announced that they will be increasing the number of employer-based visas in 2015. The move is not viewed as negatively as it might be in the United States, because it is understood as a rational, strategic, and economic decision. The Canadian government understands that skilled workers can help spur growth in their economy and they want to ensure that Canada offers an opportunity for potential employees to stay and prosper within its borders. Read More

Today the Senate is poised to pass a bi-partisan, bi-cameral agreement to replace the Workforce Investment Act with an updated system that is more streamlined and focused on training the American Workforce for jobs that are in-demand in the private sector. The NAM has long advocated for improving the federal workforce development system and we applaud the Senate for taking this important step and urge passage of the Workforce Innovation and Opportunity Act (WIOA). Senators Patty Murray (D-WA), Johnny Isakson (R-GA), Tom Harkin (D-IA), and Lamar Alexander (R-TN), along with their colleagues in the House of Representatives John Kline (R-MN), George Miller (D-CA), Virginia Foxx (R-NC) and Ruben Hinojosa (D-TX), showed true leadership is pursuing this solution.

NAM members are in need of a highly skilled workforce, have identified the skills that are necessary for success in manufacturing, and endorsed the credentials that train to those skills. Recent surveys show over 80 percent of manufacturers report a moderate to severe shortage of qualified applicants, which reduces net earnings by up to 11 percent each year. This problem is so prevalent that the NAM has created its first board of directors-level task force aimed at reducing the skills gap. Industry-recognized credentials are a key component to the solution. They allow individuals to know they are being trained in skills that are valued by the private sector, allow businesses to know they are hiring someone with the skills necessary for advanced manufacturing, and also a streamline the workforce development system by focusing finite resources on the meaningful training. WIOA recognizes these benefits and places a significant priority on this type of training. Senators Kay Hagan (D-NC) and Dean Heller (R-NV), were the primary sponsors of legislation the NAM supported called America Works, which had at its core a goal included in the WIOA, emphasizing the benefits of credentials in federal workforce training programs.

The Senate and the House should be commended for working beyond the standard Washington, D.C. gridlock and coming up with a tangible solution to the lingering skills gap problem. Once the Senate has approved the legislation, it will be sent to the House for consideration. We are hopeful the agreement will remain in-tact and the House will act swiftly to send this important legislation to the President for his signature.

The legislation is a significant breakthrough based on language from a House bill passed last year and a Senate bill passed out of the HELP committee last summer. WIA was originally passed in 1998 and has been due for reauthorization for over a decade, but it has continually stalled due to political wrangling. The bipartisan, bicameral legislation works to prioritize funding towards industry-recognized credentials, a top priority for manufacturers in worker training programs. The legislation also eliminates programs, reduces the size of the workforce boards, and streamlines reporting requirements.

The skilled workforce shortage is a significant problem facing American manufacturers. Over 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly skilled production positions, reducing net earnings by up to 11 percent. Promoting training that is in-demand and recognized by employers as necessary to success will go a long way towards solving that problem.

The NAM and its members look forward to working with both the House and the Senate as this legislation moves forward.

Yesterday, US Customs and Immigration Service announced that it had received more than enough H-1B petitions to reach the cap for FY 2015. At this point all submitted petitions will be placed in a lottery to determine which are accepted. As the USCIS announcement states, “A computer-generated process will randomly select the number of petitions needed to meet the caps…” Computers, not the employers in need of the workers, are randomly deciding who should design, build and manufacturer tomorrow’s products. Unless we address immigration reform we are driving our innovators to leave the United States.

Every day, foreign-born innovators that are already legally in the United States sit in limbo, waiting up to 10 year for their green card. These valuable employees cannot be promoted or change companies for fear of being forced to start all over again at the back of a 10 year process. This cycle needs to stop. Manufacturers need access to a skilled workforce and need to know we can hire and promote the right person for the job – not play the job lottery.

Reform of the legal immigration system is necessary for US manufacturing to succeed. The uncertainty associated with a random lottery is counterproductive to economic growth. Manufacturers want to create jobs here in the US, not drive them abroad. Gambling our future on the Federal government drawing the right person is not a sound strategy for our economy.

Today is April 1st, the first day that USCIS is accepting petitions for H-1B visas in Fiscal Year 2015. Today alone, it is expected that enough applications will be submitted to reach the annual cap of 85,000. Thousands of applications will be rejected, not due to qualifications of the applicant or necessity of the position, but because of the arbitrary cap. Today a number, with no real meaning, decides who businesses should hire and how many jobs can be created in the next year.

To highlight this, Compete America, of which the NAM is a founding member, released a jobs calculator highlighting the jobs lost due to inaction on immigration reform in the highly-skilled sector for 2014. The calculator looks at not only at losses due to visa applications that were rejected last year because the cap was reached, but also includes applications that were never made because of the limited cap numbers. Using the conservative estimation that four new jobs are created for each H-1B visa issued, the calculator estimate that in the past year, since April 1, 2013, the US has forgone 500,000 jobs.

In a time when job growth is a priority for our nation and Congress, this is represents a lost opportunity. We should be taking advantage of every opportunity we have to keep the innovators and the job creators in this county, not driving them away with outdated policies. In fact, in a report released last month, CBO estimates H.R. 2131, The SKILLS Visa Act, which takes steps towards updating the system, would “increase revenues by $118 billion over the 2014-2024 period. That increase, largely reflecting additional collections of income and payroll taxes, would result primarily from an expansion in the size of the U.S. labor force.” We are now not only losing jobs, but also costing ourselves additional revenue.

Even more regretful, this only captures one portion of immigration reform. The dysfunctional system is causing workforce problems for all employers, leaving jobs open for months at a time and reducing productivity. Our current system is not working for anyone. It is detracting from American job growth and productivity.